What is considered taxable interest on a 1040EZ form?

by Anthony R. Deutsch, CPA | Jan 25, 2019

What is considered taxable interest on a 1040EZ form?

First of all, the 1040EZ and 1040 Short Form no longer exists for 2018. The only federal tax form is the new 1040. The new form is available on the IRS’s website.

Taxable interest is reported on Line 2b of the new form. This is any interest reported to you on Form 1099-INT or 1099-OID, from banks, treasury bills, notes, bonds, or interest you receive on the repayment of any personal loans you may have made to family and friends.  

It does not include interest on municipal bonds issued by a state or political subdivision, Series EE, and Series I bonds issued after 1989 if used for higher education expenses. 

Visit the IRS’s website for more information on taxable and tax-exempt interest.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Anthony R. Deutsch, CPA, is a shareholder with Concannon, Miller & Co. PC in Bethlehem, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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